Belanjawan 2020 exemplifies the government’s continued resolve to build the necessary foundation for Malaysians to capture the full potential of the fourth industrial revolution (4IR). We commend the supportive measures such as the smart automation matching grant of up to RM2 million for local manufacturers and services companies to embrace digitalisation. This, coupled with the tax incentives provided to the electrical and electronics (E&E) industry to facilitate investment in next generation technologies will definitely spur the pace of technological adoption, especially among manufacturers.
Digitising the manufacturing sector is a key driver to Malaysia’s sustainable economic growth in the longer term. A Cisco and A.T. Kearney joint study revealed that the country’s manufacturing sector could experience an incremental growth of USD$30 billion over the next decade from 4IR[1]. This growth will be largely driven by productivity gains – increasing between USD$20 billion to USD$25 billion –and driven by the creation of additional revenue streams through new products and quality improvements, as manufacturers adopt 4IR technologies.
However, access to skilled talent and experts is still a crucial challenge for the country in order to unlock this value. Thus, we welcome the government’s allocation of RM11 million to the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) to encourage the uptake of STEM education. Simultaneously, strengthening Technical and Vocational Education and Training (TVET) with an allocation of RM5.9 billion will ensure the pipeline of skilled and semi-skilled workers will remain robust.
Aligned with the spirit of the new shared prosperity agenda, we laud the government for extending its focus to SMEs as well. The 50% matching grants amounting to RM5,000 each will ensure home-grown organisations are incentivised to digitise their operation and further build their competitive edge.
Overall, with digitalisation at its core, the Belanjawan announced today sets the nation on the right course as Malaysia forges onwards towards its Shared Prosperity Vision by 2030 (SPV 2030).
